If companies had to pay for the full environmental costs of their activities, they would have lost 41 cents out of every dollar earned in 2010 – and these costs are doubling every 14 years, according to a Trucost analysis for a KPMG report.
The environmental profit and loss-style analysis for 11 key sectors found the cost to global society of environmentally-sensitive corporate activities for food producers actually outweigh the sectors’ entire earnings, at a whopping $200 billion, and in five other sectors – electricity, industrial metals, mining, marine transport, and airlines – environmental costs could account for more than half their earnings.
In reality, these costs are not borne solely by companies but are passed on at least partially to end-users, KPMG said in the report, Expect the Unexpected: Building Business Value in a Changing World.
But it said the data gives an indicator not only of industries’ impact, but of the potential value at stake. And companies should expect to pay a rising proportion of these costs, posing a near-future financial risk, KPMG said.
Trucost says that environmental costs across the 11 sectors – which also include automobiles, beverages, chemicals, oil and gas, and telecommunications and internet – rose by 50 percent between 2002 and 2010, from US$566 billion to US$854 billion. It says the projected doubling of costs every 14 years is unlikely to be sustainable, even in the medium term.
Read the complete article at EnvironmentalLeader.com